Palm shareholders approve reverse split

Shareholders of handheld maker Palm approved a reverse stock split Tuesday, an attempt to keep the company from being removed from the Nasdaq while it prepares to spin off its operating system unit.

With the vote, Palm's board is now authorized to conduct a reverse split of between 1-for-10 and 1-for-20 before April 1. If the company approves a 1-for-10 plan, for example, an investor holding 1,000 shares would trade them in for 100 shares. Conversely, the value of those shares would climb to $6.80 each from the current trading price of 68 cents.

Palm's shares have languished under $1 since August, a level that can result in being delisted from Nasdaq. Although a reverse split would boost its price well above that threshold, the results are often temporary.

Palm is preparing to spin off PalmSource, which will focus exclusively on developing and marketing the Palm operating system.

Other issues approved by shareholders Tuesday include the re-election of three directors: Benhamou, Jean-Jacques Damlamian, a group vice president for France Telecom, and David Nagel, chief executive of PalmSource.